Fokus party advocates for wages in Croatia to be paid in gross amount

NEWS 27.01.2023 12:49

On Friday, the liberal Fokus party called on the ruling majority to introduce gross wage payments, which, in addition to the net wage, includes income tax, surcharge, and pension insurance contributions, so people can know how much they are paying in taxes to the state as an incentive for responsible spending.

Everything would still be paid out and automatically deducted from the employee’s account, but first, the gross amount would be credited to the employee’s account, so they can see every month how much money they earned and how much of that amount goes to the state, Fokus said.

“This is actually the people’s money, so everyone should have the right to receive the total amount of public benefits in addition to their salary. We believe that this is good for citizens, employers and the state in terms of strengthening responsibility and financial literacy,” said the party’s leader, Davor Nadji.

He added that people know in principle that they are paying a lot in taxes and contributions, but since this money does not go through their accounts, they often do not perceive it as their direct contribution.

He believes that it is not necessary to immediately copy the American model of paying wages to workers in the gross amount, because in practice it is better that contributions and taxes are automatically deducted from citizens’ accounts until adequate financial literacy is achieved.

A high level of citizens’ financial literacy is a basic prerequisite for eventual further liberalisation and for citizens to be able to choose what services they want to pay for to the state and what to buy on the free market, so they can have as much freedom as possible in managing their own money, Nadji added.

He also called for considering the necessary legislative amendments to include in the gross wage payments also the health insurance contribution, currently classified as an employer expense.

As far as the technical implementation is concerned, this should not pose any major challenge, Fokus said in a press release.


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